The World May Be Flat, But Nations Must Create An Environment for Innovation

ACT Study Identifies IP Protection, Trade, and Competition Polices as Critical to Global Competitiveness

Washington – Thomas Friedman tells us the world is flat, but national policies still matter for companies of all sizes looking to innovate and compete in the global marketplace, according to a study released by the Association for Competitive Technology (ACT) today.  The study identifies three national policies – robust intellectual property protection, market-based international trade, and objective competition regulation – that are critical to creating a better ecosystem for innovative companies.

The study, “National Policies as Platforms for Innovation: Reconciling a Flat World with Creative Cities,” analyzes some leading theories of innovation policy, including those of Thomas Friedman, author of “The World is Flat,”and of Richard Florida, author of “The Rise of the Creative Class.” ACT’s experts find merit in both the “flat world” and “making cities attractive to creative people” theories, but conclude that they miss the essential role of specific national policies in promoting an ecosystem for innovation.

“Leaders all over the world are seeking ways to cultivate innovation and competition,” said Steve DelBianco, vice president for public policy at ACT.  “The answers they seek will not be found in protectionism and centralized industrial policy, but in creating an environment that rewards innovation and embraces competition.”

Analyzing economic data and government policies from around the world, the authors attempt to establish basic criteria for ecosystems that promote innovation.  While many different strategies have been employed at various levels of government, commonalities emerged among global leaders, particularly in the realm of national policies.

  • Robust Intellectual Property Protections: Intellectual property law provides incentives for innovation and provides legal mechanisms for protecting and monetizing intellectual assets.
  • Market-based Trade: Nations that open their markets to the forces of competition will see greater productivity and prosperity.
  • Sensible Competition Policy: Markets need objective competition regulation— particularly one that allows the integration of multiple innovations—in a world where product life cycles are shrinking and markets are expanding.

“The research clearly shows that governments with robust intellectual property protection, market-based trade policies, and sensible competition policies are outperforming their peers,” said report co-author Braden Cox.

“As governments embrace policies to improve their innovation environments, everyone wins. Pro-innovation public policies not only cultivate national economic growth, but also create expanded market opportunities among a nation’s trading partners,” said Cox.

The study was authored by Steve DelBianco and Braden Cox of ACT.  It was released today at a panel discussion in Washington, D.C. entitled “From Rhetoric to Reality: Making Innovation More than Just a Campaign Slogan” and hosted by ACT. The panel of experts included DelBianco, Rob Atkinson of the Information Technology and Innovation Foundation, Steven Pedigo of the Greater Washington Initiative, and Veronique de Rugy of the American Enterprise Institute.

The full paper is available on the ACT website.

For More Information Contact:

Mark Blafkin

Vice President for Public Affairs

+1.202.331.2130 x104

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